After cap removal agent licensing process will be left to insurers
IRDA is expected to suggest to a high-level panel that the new Insurance Bill remove the existing 40 per cent cap on agency commission
Mumbai: Sectoral regulator Irda is expected to suggest to a high-level panel that the new Insurance Bill remove the existing 40 per cent cap on agency commission and leave agent licensing process to insurers themselves. Irda chairman T.S. Vijayan is slated to meet members of Parliamentary panel on Insurance Law (Amend-ment) Bill on Monday, said a source. The Bill is likely to be tabled in the winter session.
The regulator is likely to suggest that the agent licensing process, which is currently handled by Irda, be handed over to insurers. Currently, after training and examination, the Irda grants licence to an agent. Also, the regulator wants the new law to let insurers fix the agency commission on their own.
Currently, the law does not allow an insurer to pay more than 40 per cent of the first-year premium to the agents as commission. Sources said the regulator is of the view that a flexible commission fram-ework will make agents more productive and help deepen insurance penetration, which is only 3.2 per cent now.
( Source : PTI )
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